California Renewable Energy Push to Cost Consumers Plenty of Green

Less than two weeks ago Gov. Jerry Brown signed legislation that requires the state to obtain one-third of its electricity from renewable sources like wind, solar and geothermal power by 2020.

Currently the state’s three largest investor owned utilities generate 18% of its power from renewable sources according to the California Public Utilities Commission which is just short of the 20% target the state set for them. But since they made a good faith effort to achieve the goal they weren’t penalized for failing to meet the state mandate.

Efforts in other states to push renewable energy have not worked out as planned. In Maryland despite an overwhelming majority in the state legislature Democratic Gov. Martin O’Malley couldn’t get his wind farm initiative passed because of concerns about how much it would cost consumers.

One state study in California showed that the new law would cost utilities 7% than coal or natural gas use and that cost will probably be passed on to consumers.

But there is an out. If the costs of moving the energy are deemed excessive the utilities won’t be forced to meet the new targets and this likely to happen more than the PUC envisioned.

Ratepayers have already taken it on the chin as an analysis of renewable energy contracts under the old law showed that a whopping 59% exceeded market prices. But they were helping the environment.

Backers of the law claim that it will generate 100,000 new jobs in the state but we have heard this son before. In Massachusetts Evergreen Solar announced earlier this year that they would be closing a plant in Devens due to competition from China leaving the state holding the bag on $58 million in incentives they gave the company to set up shop. That’s a loss of 800 jobs in a job starved state.

Environmentalists are under the illusion that going green will always generate net job growth but they often forget that the higher costs of doing so actually stunt job growth in the long run as companies affected by higher energy costs trim overhead to make up the difference.

Gov. Brown may have scored major points with environmentalists by signing the law but he should have been focusing on how he was going to plug the state’s $26 million budget gap rather than increase the economic burden on cash-strapped residents.